energies Article Peaking China’s CO 2 Emissions: Trends to 2030 and Mitigation Potential Qiang Liu 1 , Alun Gu 2 , Fei Teng 2, *, Ranping Song 3 and Yi Chen 1 1 National Center for Climate Change Strategy and International Cooperation, Beijing 100038, China; liuqiang@ncsc.org.cn (Q.L.); chenyi@ncsc.org.cn (Y.C.) 2 Institute of Energy, Environment and Economy, Tsinghua University, Beijing 100084, China; gal@tsinghua.edu.cn 3 World Resource Institute, Washington, DC 20002, USA; RSong@wri.org * Correspondence: tengfei@tsinghua.edu.cn; Tel.: +86-10-6278-4805 Academic Editor: Wei-Hsin Chen Received: 21 November 2016; Accepted: 18 January 2017; Published: 11 February 2017 Abstract: China has submitted its nationally determined contribution to peak its energy-related emissions around 2030. To understand how China might develop its economy while controlling CO 2 emissions, this study surveys a number of recent modeling scenarios that project the country’s economic growth, energy mix, and associated emissions until 2050. Our analysis suggests that China’s CO 2 emissions will continue to grow until 2040 or 2050 and will approximately double their 2010 level without additional policy intervention. The alternative scenario, however, suggests that peaking CO 2 emissions around 2030 requires the emission growth rate to be reduced by 2% below the reference level. This step would result in a plateau in China’s emissions from 2020 to 2030. This paper also proposed a deep de-carbonization pathway for China that is consistent with China’s goal of peaking emissions by around 2030, which can best be achieved through a combination of improvements in energy and carbon intensities. Our analysis also indicated that the potential for energy intensity decline will be limited over time. Thus, the peaking will be largely dependent on the share of non-fossil fuel energy in primary energy consumption. Keywords: emission peaking; China; mitigation 1. Introduction The Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (IPCC AR5) states that, if the increase in global mean surface temperature is to have a likely chance of being limited to two degrees Celsius by 2100, the global “budget” left for carbon emissions is less than 1778 Gt CO 2 [1]. This space will be exhausted in less than 30 years if global carbon emissions continue their current trend. China is both the largest developing country and the largest CO 2 emitter in the world. Low-carbon development has become an urgent need both domestically and internationally. China’s rapidly growing energy consumption and its coal-dominated energy mix create additional and serious environmental problems, including local air pollution and depletion of water resources, as well as the possibility of energy insecurity. In this context, China has made great strides in controlling fossil-fuel carbon emissions and has increasingly taken on a leadership role in combating global climate change and moving to a cleaner and more efﬁcient low-carbon economy. As Vice Premier Gaoli Zhang pointed out, responding to climate change is necessary if China is to achieve sustainable development at home and fulﬁll its international obligations as a responsible major country [2]. The 12th Five-Year-Plan (FYP) period (2011–2015) marked a new era in China’s climate actions. The country incorporated binding energy- and carbon-intensity reduction targets, and non-fossil energy (nuclear, hydro, solar, wind, Energies 2017, 10, 209; doi:10.3390/en10020209 www.mdpi.com/journal/energiesEnergies 2017, 10, 209 2 of 22 biomass, and geothermal) targets into China’s top economic and social development plan, marking the institutionalization of domestically enforceable climate-change policies. To achieve these targets, the government has developed and implemented a suite of plans and policy instruments, and is on track to beat its 2015 targets [3]. By 2014, China had reduced its energy intensity and CO 2 emissions intensity by 29.9% and 33.8% respectively, compared to 2005 levels [4]. In 2014, China pledged to peak its CO 2 emissions in around 2030, with the intention of trying to peak earlier, and to increase the proportion of non-fossil fuels in its primary energy consumption to about 20% in 2030 [5]. As input to international climate change negotiations under the United Nations Framework Convention on Climate Change, Intended Nationally Determined Contributions (INDCs) outline the post-2020 climate goals and actions that countries intend to undertake. In 2015, China’s INDC echoed the peak year and CO 2 intensity goals, and also put forward two additional goals for 2030: (1) reducing carbon intensity by 60%–65% below 2005 levels; and (2) increasing its forest carbon stock volume by around 4.5 billion cubic meters above 2005 levels [6]. How might these goals be achieved? In order to understand how China might develop its economy while controlling CO 2 emissions, this paper surveys a number of recent modeling scenarios that project the country’s economic growth, energy mix, and associated emissions for the coming decades. In Section 2, this paper ﬁrst examines several “reference” scenarios. They project that China’s emissions will continue to increase and, by the target year of 2030, will have grown by anywhere between 21% and more than 100%. The paper then examines a number of “alternative” scenarios that assume the implementation of additional, more aggressive, policies. Eight out of twelve of these alternative scenarios project that CO 2 emissions will peak or plateau between 2030 and 2040 and decline thereafter, while four scenarios project an emissions peak around 2020. The paper then provides a more detailed comparison of the scenarios, highlighting their results, and examining their underlying assumptions about key driving forces behind China’s development and how each of them can impact CO 2 emissions. Section 3 analyzes the interactions among these drivers that will determine how early, or late, the peak in emissions is likely to occur, at what level, and how steeply emissions will decline afterwards. Section 4 provides a more in-depth analysis of one alternative scenario, to illustrate how a CO 2 emissions peak could be achieved in 2030 and how CO 2 emissions could be steeply reduced by 2050. This alternative scenario suggests that such a development path can be achieved through deep de-carbonization of the economy and the use of advanced technologies to enable major efﬁciency gains, particularly in the industry, transport, and construction sectors. Section 5 presents an uncertainty analysis of the factors that are likely to inﬂuence the timing of China’s CO 2 emissions peak. Section 6 provides a summary of conclusions based on the scenario analysis and makes recommendations on policy actions that will be important to achieve deep de-carbonization of China’s economy. 2. Comparison of Scenarios This section in this paper surveys energy- and emissions-modeling scenarios for China from 12 recent representative studies (see Table A1 in Appendix A). Most of these studies were published after 2010 and they reﬂect the most recent projections made by the relevant research teams. It is difﬁcult to make comparisons across models because of their different methodologies, macro-economic drivers, embedded assumptions, parameters within models, and different storylines assigned by the modelers. Nevertheless, it is still valuable to interpret the impacts of different social and economic assumptions on China’s long-term energy transition and shifts in the energy mix. Despite the differences among scenarios, the results still provide reasonable indications of China’s possible emissions pathways. The information presented here can provide a useful input for policymakers in China as they confront energy-related decision-making in the coming decades, and for international audiences as they seek to understand the implications of China’s climate commitments and policies. The literature on energy and climate modeling includes three broad categories of scenarios. The ﬁrst category is the so-called “no new policy scenario”, which includes energy or climate policies implemented before a base year or “cut-off year” (for example, 2010); assumes that no newEnergies 2017, 10, 209 3 of 22 policies will be adopted after the base year; and projects the emission trends under these policies assumptions. The second category is the “current policy scenario”, which projects emissions under currently implemented and planned policies. (Planned policies are those policies that have not yet been implemented at the time in the base year but have been included in well-established policy proposals.) The third category is the “alternative scenario”, which might not be based on current or planned policies, but instead assumes the adoption of breakthrough technologies, and innovative policy and behavior change. Alternative scenarios are based on technologies, policies, and measures that encourage a shift in the patterns of both energy consumption and carbon emissions away from past trends. Alternative scenarios are based on predetermined storylines, such as strong carbon pricing or adherence to low carbon-development pathways. In this paper, we combine a number of “no new policy scenarios” with “current policy scenarios” to form the category “reference scenarios”. The rationale is that it is difﬁcult to separate the ﬁrst two categories based on information contained in the literature. The existing literature doesn’t clearly demonstrate which policies have been considered in the scenarios and which have not, and the stage of policy implementation is also often unclear. Thus, in this section, we focus our analysis on two categories only: reference scenarios and alternative scenarios. In particular, our deﬁnition of reference scenarios cannot be conﬂated with business-as-usual (BAU) scenarios. Scenarios categorized as “BAU” generally explicitly exclude some current or planned policies, whereas our reference scenarios include some scenarios that include such policies. This is important to consider in any efforts to compare efforts among countries. We summarized the major features of the various models surveyed in this paper. Summary Table A1 and additional information of these models are provided in Appendix A. 2.1. CO 2 Emissions: Reference Scenarios Figure 1 shows the range of projected CO 2 emissions under the “Reference Scenarios” that were collated for this paper. It should be noted there is also a difference in emission of base year 2010. Such difference is largely due to the choice of different inventory data that different models use for calibration [7]. For year 2030, all reference scenarios project a continuously increasing trend of China’s emissions relative to the 2010 level, although the increase factor differs across models. The lowest estimate is from AIM-Enduse (Asian-Paciﬁc Integrated Model Enduse), which projects a 21% increase by 2030; the highest is from GCAM 3.0 (Global Change Assessment Model), which projects a 119% increase in year 2030. Three Chinese models (China-MARKAL, PECE and ERI) project emissions increases that range from 68% to 74% above levels in 2010; this is very close to the median value of 77% among all scenarios surveyed. In terms of absolute emissions in year 2030, the models project a range from 9.6 to 17 Gt CO 2 , with a median of 14.6 Gt CO 2 . Energies 2017, 10, 209 4 of 22 Figure 1. China’s CO2 emissions, 2010–2050, projected by Reference Scenarios. Source: See Table A1 for data sources for each scenario in Appendix A. 2.2. CO2 Emissions: Alternative Scenarios Many alternative scenarios have been designed and reported, using various energy modeling platform comparison exercises, for example, AMPERE, EMF, AMF, and ROSE. Most of these scenarios have been designed to achieve a given global emissions goal. In these cases, a specific country’s emissions path is determined by the global emissions budget and the principle of budget allocation among countries, rather than being determined by countries’ policies. To enable emissions analysis based on policy strength, the current study uses carbon price as a proxy variable to select scenarios with comparable policy strength. In this study, the carbon price proxy is set at USD7–USD10 in 2020 and then roughly doubled every ten years until 2040. The 2020 carbon price proxy is set at this level for two reasons: Firstly, under such an assumption, the sectors that account for about 4% of China’s GDP would be heavily affected, producing a comparable effect to that of the EU case under the 20 euro carbon price, indicating strong policy effort. Secondly, China will implement a national emission trafing system (ETS) starting from year 2017 based on seven provincial pilots, the highest carbon price in those pilots are within this range and provide a reasonable assumption for the carbon price in national ETS as an indicator for the stringency of climate policies in China. Figure 2 shows the range of projected emissions under the “Alternative Scenarios” selected from the literature. For year 2030, the models’ projected emissions range from 8.1 (AIM-Enduse) to 13.7 Gt CO2 (GCAM3.0), with a median of 10.3 Gt CO2. Compared with emissions in 2010, the models project a median increase of 38%, which is significantly lower than the projected increase under the reference scenarios. Between 2010 and 2050, the models’ projected emissions range from a decrease of 40% (AIM-Enduse) to an increase of 44% (GCAM3.0), with a median decrease of 3%. In terms of absolute emissions, the models project a range from 4.7 (AIM-Enduse) to 11 Gt CO2 (GCAM3.0) with a median of 7.4 Gt CO2. Figure 1. China’s CO 2 emissions, 2010–2050, projected by Reference Scenarios. Source: See Table A1 for data sources for each scenario in Appendix A.Energies 2017, 10, 209 4 of 22 For year 2050, the reference scenarios project that emissions will increase by a factor between 59% and 153%, relative to the 2010 level, with a median value of 101%. That is, emissions in year 2050 are forecast to be approximately double the emissions level of 2010. In terms of absolute emissions, the models project a range from 12.7 to 19.3 Gt CO 2 with the median value being 15.7 Gt CO 2 . 2.2. CO 2 Emissions: Alternative Scenarios Many alternative scenarios have been designed and reported, using various energy modeling platform comparison exercises, for example, AMPERE, EMF, AMF, and ROSE. Most of these scenarios have been designed to achieve a given global emissions goal. In these cases, a speciﬁc country’s emissions path is determined by the global emissions budget and the principle of budget allocation among countries, rather than being determined by countries’ policies. To enable emissions analysis based on policy strength, the current study uses carbon price as a proxy variable to select scenarios with comparable policy strength. In this study,